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Friday, January 18, 2008

UPDATE:I've added a note about Investor's Business Daily recent editorial at the bottom of this post.

Just about every media outlet has covered the recommendations coming from the National Surface Transportation Policy and Revenue Study Commission's two-year study that was released Tuesday. (report available here)

Basically, the Commission is recommending that the current gasoline tax of 18.4 centers per gallon be raised 40 cents over the next five years. Under their proposal, the tax would go up anywhere from 5 cents to 8 cents each year and then indexed to inflation afterward to help fix the nation's transportation infrastructure.

The study also calls for a new federal bureaucracy to centralize transportation decision making, new limitations on states’ abilities to attract private sector investments and a first of its kind federal tax on all public transportation and intercity passenger rail tickets.

U.S. Secretary of Transportation Mary E. Peters, and Commissioners Maria Cino and Rick Geddes, won't sign the final report, releasing their own recommendations under a 'Chairman's Statement.'

From their press release:

“Raising gas taxes won’t improve traffic congestion, it will only perpetuate our ineffective reliance on fossil-based fuels to fund infrastructure and send more of Americans’ hard-earned money to Washington to be squandered on earmarks and special interest programs,” Secretary Peters said. “A better way forward is to provide incentives to states willing to pursue more efficient approaches and to invest federal funds more effectively to give commuters real relief from gridlock.”

The Secretary said she was deeply troubled by the Commission’s call for an up to 40 cent per gallon federal gasoline tax increase over the next five years, rising to up to 91 cents in 20 years when indexed for inflation. She added the report also assumes that states will increase their gas taxes by up to 60 cents per gallon over the next five years. She said recent studies, including one from the Government Accountability Office last summer, have concluded gas taxes don’t work to reduce traffic congestion.

“There is nothing to indicate that Washington would do a better job spending billions more of the taxpayers’ money than it has so far,” said Secretary Peters. “The answer isn’t more taxes and added layers of bureaucracy, it is having the courage to say the current system is broken and it is time to find a better way to invest in, manage and operate our transportation system.”

Here's the thing...following the collapse of the I-35W bridge in Minneapolis, Senator Tom Coburn (R-Oklahoma) offered an amendment calling on the Senate to place a temporary moratorium on transportation pork until all structurally deficient bridges are repaired. Amazingly, the Senate voted 82-14 to prioritize pork over bridge repairs in the transportation budget. (My previous posts on Sen. Coburn's efforts on the Transportation bill are here and here.)

In July, Taxpayers for Common Sense reported that the FY08 Transportation, Housing and Urban Development and Related Agencies Appropriations bill contained more than 1,400 earmarks worth a total of nearly $2.2 billion for every state in the nation except, interestingly, Alaska. (Their listing of the earmarks is available here.)

TCS says:

"One of the more interesting aspects of the manager’s report is the discussion about the dire financial straits facing the Highway Trust Fund (HTF). The HTF is the account in which all of the nation’s gas tax receipts are deposited for use repairing and building the nation’s highway system. The HTF will run a negative balance sometime in 2009 (since this is the FY08 budget cycle, that’s next year!), yet the Congress and the President fail to make any substantive proposals that would alter this outcome. The Committee unhelpfully points out that the President didn’t propose any new ideas, and then happily slices and dices a number of programs into 1,400 earmarks.

TCS has long maintained that earmarking is one of the problems that has led to this bleak outlook for the HTF. Lack of prioritization has been a huge problem for our nation’s transportation program for many years now. When the money coming out of Washington is so thinly sliced, it spreads it out to too many projects for the trust fund to support. In addition, when transportation decisions are made based on political might (ie. earmarks) instead of on the nation’s true transportation needs, the priorities still need to be funded. Again, this spreads the limited financial resources too thin and the trust fund balance slips toward the red....It is no surprise that the Chair and Ranking of the Appropriations Committee (Reps. Obey (D-WI) and Lewis (R-CA)) and the Transportation-HUD subcommittee (Reps. Olver (D-MA) and Knollenberg (R-MI) were some of the biggest winners in this bill.

In all, the Appropriations Committee garners more than $164 million, nearly 23 percent of the $724 million in Congressional adds and increases, yet have only 17 percent of the House’s total membership.

Other earmarks included in the bill:

$100,000 for the Murray Athletic Center at Elmira College (a private institution) in Horseheads, NY, secured by Rep. Rand Kuhl (R-NY)$250,000 for construction at the Walter Clore Wine and Culinary Center in Prosser, WA, secured by Rep. Doc Hastings (R-WA)$100,000 for the Wakely Lodge Resort, a golf course, for renovation of the Wakely Lodge in Hamilton, NY, secured by Rep. John McHugh (R-NY)$81 million (admin request was $74.2 million) for the Center for Advanced Aviation System Development (CAASD), which is a project of the Mitre Corporation, headquartered in McLean, Virginia and Bedford, Massachusetts. This was not disclosed as an earmark. $750,000 for the Indian Street Bridge project in Martin, Florida, secured by Blue Dog Democrat Rep. Mahoney (FL).$1 million (two earmarks) for the Interstate 66 project in Kentucky, secured by Rep. Harold Rogers (R-KY).$1 million for the Ohio River Bridges Project in Louisville, KY, secured by Rep. Yarmuth (D-KY).$50,000 for the National Forest Recreation Association, for construction of a National Mule and Packers Museum in Bishop, CA, secured by Rep. McKeon (R-CA).$250,000 for Downtown Roanoke (VA) for Infrastructure renovations for awnings of the historic market, secured by Rep. Goodlatte (R-VA).$100,000 for the Town of Boydton (VA) for development of the Walking Tour of Boydton, secured by Rep. Virgil Goode (R-VA)$250,000 for Phenix City (AL) for riverfront development, secured by Rep. Mike Rogers (R-AL)

Perhaps if they weren't so busy spending the transportation funds on items like wine and culinary centers, museums, markets, walking tours and golf courses, they'd discover they didn't NEED a new gas tax to cover the costs of transportation infrastructure improvements

In the end, if you give the federal government more money, they will spend it on their own pet projects...all the while claiming they don't have enough money and then voting to make us pay more in taxes...it's a vicious cycle.

The problem isn't a lack of money for the needed infrastructure improvements - it's the lack of making such improvements the priority. If they had been truly interested in the infrastructure, 82 senators wouldn't have voted to table Sen. Coburn's temporary moratorium on transportation pork.

And while I blame Congress for doing this, I also blame the American people for letting it happen.

UPDATE:

A federal panel wants to triple the gasoline tax to improve the nation's infrastructure. A better solution is to limit spending from gasoline tax revenues to essential -- and real -- highway projects, says Investor's Business Daily (IBD).Consider:

* A mere 60 percent of revenues collected from the gas tax are left for essential road work. * One-tenth of federal transportation spending is pork; in the last transportation bill, more than 6,000 pet projects costing $24 billion drained money away from where it was needed.* Gas tax revenues are used to fund bike paths, nature trails, pedestrian walkways, visitors centers, public parks, parking lots and museums.

In an era of painfully high retail fuel prices, the average U.S. household is paying roughly $214 in federal gasoline taxes each year, says IBD. Add in state and local levies and the total ranges from $313 in Alaska to $588 in California. Congress shouldn't dare ask for more.

Yes, the country's roads and bridges need work. It would be wrong, though, to pry more money from motorists when the job can be done by spending current revenues they way they are supposed to be spent. The problem is not a lack of revenues, but a lack of character in Washington, says IBD.

12 comments:

Admitted, there is a lot of pork that is unrelated to transportation. BUT, you shouldn't cast such a wide net. The Phenix City Riverfront Redevelopment funds are an offset for transportation improvements contracted by the local government. That project is approximately $3 million total. If it had been contracted under federal procurement rules and pushed through the federal transportation procurement system, it would not have been completed for 10 years and would have cost $7-$10 million. Having local and state governments contract road projects without federal funding being allocated and then obtaining a generic federal offsetting grant could potentially save taxpayers $100 billion per year because of the onerous burden of federal rules and regulations.

Actually, flagwaver, I'd go back to the Constitution which really doesn't grant the federal government the authority to do local roads. So, my first position would be that the federal government has no authority for roads and all the money they take from citizens would be better off being kept by them within their states and let the states take over the responsibility for roads.

Ohio is perfectly capable of handling the creation and maintenance of the road system. So why do we expect that this is something the feds need to do in the first place?

Imagine how much money each state would have to work with if its residents didn't have to send such a significant amount of tax dollars to the feds - who create their own bureaucracy and siphon off wages, etc... for federal employees and then dole out what remains - with the expectation that we'll be so thankful for their largese, that we'll continue to give them the power to take and dispense as THEY see fit...

We know that this is not about infrastructure, but about the federal government seizing an opportunity during the crisis of oil prices. This isn't about the bridge in Minneapolis, but about the bureaucracy taking more money and more controls.

Come on, Chris...look up the definition of a 'post road'....it's a road over which mail is carried (Constitutional Dictionary: http://www.usconstitution.net/glossary.html)

And even if you construe the Constitution to give authority to Congress for all roads in the nation, it still doesn't equate to giving the feds the authority to continually divert any funding for such roads to pork projects having nothing to do with roads - and to constantly raise taxes in order to fund such pet projects.

This is a problem easily described on two levels. You have correctly pointed out the federal one, with pork projects and projects having nothing to do with roads taking precedence over legitimate infrastructure repair. The other level devolves to the state, who uses imitation of the federal government as the sincerest form of flattery. The twin cities in MN is a prime example of this. If they had been paying more attention to keeping up infrastructure and less to building new sports arenas (please take note of this Toledo and Lucas County), perhaps this bridge could have been repaired or replaced before a tragic accident.

There is nothing sexxy for a politician to go to the microphones with when repairing a road or a bridge however, at least nothing as attractive as proudly announcing a new taxpayer financed sports facility that isn't needed by anyone other than the bloated sports franchise that would like more luxury boxes.

The crime of this report is that the people on the commission that are in the industry could not find a way to listen to the administration and put in some of the necessary reforms that are truly needed.

What you can commend the commission for, is streamlining over 100 different programs into 10. This should help simplify the process.

Pork is not the only reason that the Highway Trust Fund is out of money. The biggest reason is inflation. Double digit inflation.

The link above has a presentation on the increases in costs of everything that it takes to build a road. Why? It takes fuel to build a road, to collect the necessary materials and put them in place. We all know how much we are spending on fuel. It costs more to drive our cars. It costs more for contractors to move their equipment.

Is pork a problem? Yes. But it pales in comparison to the overall problem.

What is needed is a combined effort of industry and the administration to work on streamlining FHWA requirements, targeting the dollars toward projects that are needed and streamlining those projects to a least cost alternative that still meets a reasonable safety standard.

But the reality is that more funding is going to be needed to solve address the increased cost of delivering projects. Whether the federal government does it or the state governemnt does it, it is still going to cost more money.

We have railed about how long it takes to build projects that are needed. US 24 is a great example. But these projects cost hundreds of millions of dollars.

Bring someone from ODOT on your radio show and have them lay it out for you if that will help. This problem is more than pork.

BSRG - I don't disagree that costs have gone up all over the place - and road improvements are certainly no exception.

Government regulations have also increased, which also adds to the costs.

You're correct that it's not just the pork. But before any elected official starts talking about raising taxes, I want CUTS! I want them to stop doing all these frivolous things, stop diverting 'road' money to stuff like museums and the like, stop adding rules and regulations (which are created primarily to serve some special interest) which increase the costs...

There are a LOT of things government could do to reduce the costs BEFORE they start talking about raising taxes.

Because you know that those additional funds won't be restricted to just the roads - and that's the problem.

Yes, there are some good things in this Commission report - no one is ever 100% wrong 100% of the time...